How To Start An LLC In 6 Steps (Updated: Apr. 2026)

You must first understand what a Limited Liability Company (LLC) is and why it’s such a popular business structure before actually forming one. An LLC is a legal business entity offering personal liability protection for its owners. It separates your personal finances and business assets, meaning you’re protected from business debts and legal obligations.

LLCs are formed at the state level. This means that your filing requirements, rules and regulations, processing times, and costs depend on your operating state.

You must file your state formation document, commonly called the Articles of Organization, to officially form your LLC. This must be done with the appropriate state agency based on your operating location. Generally speaking, state filing fees range from $50 up to $200, depending on your operating state. You can start your LLC immediately or within around two weeks when filing online.

I’ve discussed how to start an LLC in all 50 states by covering the core formation steps that apply to your business.

How To Start An LLC In 50 States

While the LLC formation process uses the same general framework, each state has its own filing rules and regulations. You can select a free state-specific guide below to learn your exact state filing requirements.

Despite state-level differences, your LLC formation process generally follows these 6 steps.

1. Pick a suitable LLC name.
2. Choose a Registered Agent.
3. File your Articles of Organization.
4. Complete your LLC’s internal Operating Agreement.
5. Acquire your LLC Employer Identification Number (EIN).
6. Obtain your required business licenses and permits.

1. Choose A Suitable LLC Name

Your first step when forming your LLC is to choose a suitable business name that complies with state rules.

Most states have two essential LLC naming requirements:

1. Your LLC name must include an approved designator such as “LLC” or “Limited Liability Company.”
2. Your LLC name must be unique and distinguishable from existing state-registered business names.

You can use the state’s official Business Records Search database to confirm if your LLC name is unique.

For example, you can use the Business Search Tool in Georgia, allowing you to check if a similar LLC name already exists.

Furthermore, some states offer a dedicated name availability check tool. This will instantly show if your desired LLC name is unique and available to use.

Example: Utah’s name availability tool immediately tells you if your desired LLC name can be used.

Alongside these general rules, each state has different LLC naming requirements that must be followed for your LLC name to be accepted.

You can review my LLC Naming By State guide to see the specific state naming rules.

2. Choose A Registered Agent

Your next step when forming your LLC is to appoint a suitable Registered Agent. This is an individual or company officially authorized to receive and process state regulatory notices, legal documents, and Service of Process on your behalf.

Every U.S. state requires LLCs to appoint and maintain an official Registered Agent when operating. They must have a physical street address in their official formation state. You can NOT use a P.O. box for your Registered Agent address, except in Ohio.

You have three main LLC Registered Agent options to choose from:

1. Yourself.
2. A trusted friend or family member.
3. A professional Registered Agent Service.

With your Registered Agent information becoming part of the public record, I highly advise hiring a professional Registered Agent Service. Using their business address keeps your personal information from appearing on the public record.

You can review my article on the Best Registered Agent Services for further details.

3. File Your Articles Of Organization

You must file your Articles of Organization to officially form your LLC in any U.S. state. This is typically filed with the Secretary of State or other official state agency, depending on the state.

Your LLC does NOT legally exist until this formation document has been filed and accepted by the state.

Example: Your Delaware LLC is NOT formed until your Certificate of Formation has been filed and accepted by the Delaware Secretary of State. This is set under Delaware LLC Act § 18-201(b).

Your required Articles of Organization information varies depending on your operating state.

Generally speaking, most states require the following information:

• Your LLC’s full legal name.
• Your Registered Agent’s name and physical address.
• Your LLC’s principal business address.
• Your LLC’s business purpose.
• Your management structure.
• Your intended operating location.
• The signature of one or more LLC organizers.

You can choose between two main filing methods in most states, with your choice determining your formation time.

1. Online: Processing usually happens immediately or within a short timeframe via the SOS. However, approval times can be longer during peak filing periods.
2. By mail: Paper forms typically take longer to process. This can range from a few business days to several weeks + Mailing time.

For more information, you can read this article: LLC Formation Documents.

4. Complete Your LLC’s Internal Operating Agreement

Your LLC Operating Agreement is a foundational internal legal document outlining how your LLC will be owned, operated, and managed. Its main purpose is to define your ownership percentages, management authority, profit distributions, voting rights, and procedures for major business decisions.

Some states, such as Delaware, California, Missouri, Maine, and New York, require you to maintain an Operating Agreement when conducting business in the state.

Example: All New York LLCs must adopt a written Operating Agreement within 90 days after being officially formed. This is set under New York Limited Liability Company Law § 417.

You do NOT need to file your Operating Agreement with the Secretary of State or any other official government agency, even in states that require you to maintain one. As an important internal business document, you can keep it with your official business records.

Your Operating Agreement must reflect your LLC’s management structure:

• Member-managed LLC: All LLC members participate in daily business operations and LLC decision-making.
• Manager-managed LLC: LLC members appoint one or more managers to run and operate the business.

You can download one of my free LLC Operating Agreement templates below to get started.

5. Acquire Your LLC’s Employer Identification Number (EIN)

An Employer Identification Number, commonly known as an “EIN,” is a nine-digit Federal Tax identification number issued by the Internal Revenue Service (IRS). It’s mainly used to identify your business for Federal Tax reporting purposes, alongside several other essential business tasks:

• Open a dedicated business bank account.
• Complete required Business Licenses and Permits.
• Identify your LLC for Federal Tax.

If you’re a Single-Member LLC without employees, you’re NOT legally required to get an EIN. However, many Single-Member LLC’s choose to get one for banking, licensing, and privacy purposes.

Your EIN is completely free to get regardless of your application method. You can choose one of three main methods, each with a different processing time:

• Online: Used by U.S. residents with a valid Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). Your application takes approximately 15 minutes, after which your EIN will be issued immediately. Read my guide: How To Get EIN Online.
• By mail: Used by non-U.S. residents without an SSN or ITIN. Complete Form SS-4 and mail it to the IRS. Your filing should be processed in approximately four weeks + mailing time. Read my article on How To Get An EIN Without SSN Or ITIN for detailed instructions.
• By fax: Also used by non-U.S. residents without an SSN or ITIN. Complete Form SS-4 and fax it to the IRS to skip the mailing time. Your filing should be processed in approximately four business days.

6. Obtain Your Required Business Licenses And Permits

Business licenses and/or permits legally authorize your LLC to operate in a specific industry or operating jurisdiction. They’re issued at three main levels of government:

• State level: Issued by state agencies. These may apply to certain professions or statewide business activities.
• Municipal level: Issued by city or county agencies. These are often required to operate within a local jurisdiction.
• Federal level: Issued by federal agencies. Only required for businesses operating in regulated industries.

Furthermore, Business licenses can be split into two main categories:

1. General business license: May be required for LLCs operating in specific cities, counties, or states, regardless of their operating industry.
2. Industry-specific license: Required for businesses operating in regulated industries. Examples include construction, food service, healthcare, or transportation.

You need a Seller’s Permit in most states if your LLC sells taxable goods or services. This authorizes your LLC to collect Sales Tax from customers and remit it to the state.

Read this article: How To Get Business License By State.

What To Do Once Your LLC Is Approved And Running

You must complete several mandatory steps once your LLC is approved to avoid potential state penalties and fines, maintain your good standing, and operate your business legally.

These ongoing obligations apply to most operating states.

• Open a dedicated LLC business bank account.
• File your LLC Annual Report.
• File and pay your required taxes.

1. Open A Dedicated LLC Business Bank Account

Your first step once your LLC is formed is to open a dedicated business bank account. This keeps your business income and expenses organized and separated from your personal finances, ensuring that your accounting and record-keeping are maintained.

This preserves your limited liability protection and reduces the risk of “piercing the corporate veil.”

2. File Your LLC Annual Report

Most LLCs must file their Annual Report once a year to maintain their good standing. This updates the state with your current business information.

Some states require you to file every two years instead of once. This is called the Biennial Report, and functions in the same way as the Annual Report.

Most Annual or Biennial Reports cost between $30 and $200 per filing.

For more information, refer to this article: LLC Annual Report By State.

a. When Is The Annual Report Due?

Your Annual Report due date depends on your operating state. Most states use one of three main methods to determine the due date:

1. In most cases, this is based on your LLC’s effective date (similar to your LLC’s birthday).
2. Some states use a quarterly filing system.
3. Other states require LLCs to file on the same fixed date.

b. When Is The First Annual Report Due?

Your initial Annual Report is due the year after your LLC is approved.

Example: Your LLC was approved on May 15, 2026. Your first report is due sometime in 2027.

c. How To File Your Annual Report

You can file your Annual Report online or by mail in most states. The online filing method is generally much faster and easier to complete, making it my recommended option.

3. File And Pay Your Required LLC Taxes

You do NOT pay Federal Taxes at the entity level (by default) if you’re operating as an LLC. Instead, LLC members report and pay taxes through their personal tax returns.

The Internal Revenue Service (IRS) taxes LLCs based on the number of owners:

• A single-member LLC is taxed as a Sole Proprietorship.
• A multi-member LLC is taxed as a Partnership.

You can elect to be taxed as an S-Corporation or C-Corporation by filing the relevant IRS forms.

You may also be subject to State Income Taxes, Sales Tax, and Local Taxes, depending on your operating location and business activities.

Advantages And Disadvantages Of Starting An LLC

Forming an LLC offers a balance of three things: flexibility, liability protection, and simplicity. Once you understand the pros and cons, you can decide if operating as an LLC is the right choice for your business structure and needs.

I’ve listed the main ones below to help you make the right choice.

1. Pros

• Tax flexibility: You can operate as a Sole Proprietorship, Partnership, C-Corporation, or S-Corporation, depending on your IRS election.
• Limited liability protection: Your LLC members are protected from personal liability for most legal liabilities and lawsuits.
• Management options: Your owners can manage your LLC directly or appoint managers. This provides more flexibility than Corporations.
• Simplicity: An LLC is simple to form and maintain in most cases, with fewer formal requirements.

2. Cons

• Ownership transfer challenges: Multi-Member LLCs need approval from other members to transfer ownership interests.
• Self-employment taxes: LLC members may need to pay Medicare Taxes and Social Security from their profit shares.
• Limited lifespan: If an LLC member dies, withdraws, or declares bankruptcy, some states require your LLC to dissolve. This is the case unless stated in your Operating Agreement.
• State variation: LLC laws and ongoing compliance measures vary significantly between states. This may create compliance complexity if not properly addressed.

Weighing up the different pros and cons is essential before forming your business. Consider your desired ownership plans. long-term compliance needs, tax impact, and potential growth, then make your decision.

Frequently Asked Questions